Which documents in an employer-sponsored employee relocation home sale were subject to Florida documentary stamp tax?

Plain-English summary

Documentary stamp tax applied only to the completed deed from the relocating employee to the third-party buyer. That deed conveyed the Florida real-property interest at closing.

The six antecedent documents reviewed by the Department did not convey title: the relocation-management agreement, employee sale contract, durable power of attorney, incomplete deed with no grantee, relocation-company sale contract with the buyer, and lender instruction. Before the third-party closing, no completed deed capable of transferring legal title existed.

What this means for you

The ruling was document-specific. A relocation program can avoid an additional taxable conveyance when its preliminary agreements and authority documents do not themselves transfer a real-property interest.

Common questions

Q: Was the final deed taxable? Yes.

Q: Was the deed in blank taxable before completion? No, on the stated facts.

Q: Were the relocation contracts or power of attorney taxable? No.

Q: Did the Department rule on unsubmitted documents? No.

Citations and references

• Fla. Stat. § 201.02(1) — documentary stamp tax on conveyances of Florida real property
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01B4-010

Original ruling text

SUMMARY

QUESTION: Is documentary stamp tax, as imposed by s.
201.02(1), F.S., due only on the completed deed to the
third party under an employee relocation transaction, or is
the tax due on any other antecedent instruments (provided
as exhibits) as well?

ANSWER - Based on Facts Below: Florida's documentary stamp
tax, as imposed under s. 201.02(1), F.S., applies to any
instrument that conveys an interest in Florida real
property. Documentary stamp tax is due on the deed to third
party. No documentary stamp tax is due on the antecedent
instruments provided as exhibits since none of the
instruments convey a taxable interest in Florida real
property.

Nov 20, 2001

Re: Technical Assistance Advisement No. 01B4-010
Documentary Stamp Tax - Documents Made in Connection With
Employee Relocation Transactions
Section 201.02(1), F.S.
XXX ("Client")
XXX ("RMC")

Dear :

This is in response to your letter dated September 10,
2001, requesting a Technical Assistance Advisement regarding
application of Florida's documentary stamp tax as imposed under
s. 201.02(1), F.S., upon certain documents made in connection
with corporate employee relocation transactions.

Facts as Presented by Petitioner

Corporate employee relocation programs assist employees who
are making employer-sponsored, job-related moves. When an

employer determines that an employee is to relocate, the
employer puts the employee in contact with a relocation
management company ("RMC"). The RMC typically offers the
employee a contract for sale of the employee's residence at a
fair market price determined by one of two methods. A contract
of sale (one like exhibit B, provided for review) is offered by
the RMC to the relocating employee after a fair market value is
determined.

After the employee signs the contract, the RMC markets the
residence through a real estate broker to find a buyer for the
property. At some point after the employee signs the contract
with the RMC, the employee will vacate the residence and move to
the new job site. To assist the employee in that move and in
procuring housing at the new job site, the RMC advances to the
employee the financial equity available in the home.

When the relocating employee vacates the residence, or at a
later time, the employee provides the RMC with documents that
will enable the RMC to transfer legal title to the property to a
third party buyer at the time of closing with the third party.
The documentation may be in the form of a power of attorney
enabling the closing agent to completely make and execute a deed
on behalf of the transferring employee to the third party buyer,
or it may take the form of a "deed-in-blank" (a deed signed and
acknowledged by the transferring employee with the name of the
grantee left blank for completion upon closing with a third
party buyer) coupled with authorization to nominate the grantee
and fill in the grantee's name. Examples of such documents were
attached as exhibits C and D. The RMC then markets the
residence and enters into a contract to transfer the property to
a third party under a contract of sale (an example of this
contract was attached as exhibit E).

The RMC manages the closing with the third party through a
retained closing agent. At the closing, the closing agent
completes and then records the deed. The deed is from the
relocating employee to the third party. The closing agent
remits documentary stamp taxes on the deed. At no time before
the closing with the third party does a completed deed exist
that is capable of transferring legal title to the property in

question from the relocating employee to anyone else.

At the conclusion of the sale process, the RMC bills the
corporate employer for all property related costs, including the
service fee due for handling the particular employee relocation
and the costs of the property's sale, such as the broker's
commission, property taxes and other taxes. If the price paid
by the third party is more than the price agreed upon between
the employee and the RMC, the RMC tenders the excess to the
employer, or credits the excess amount against fees and other
costs contractually due from the employer. If the price paid by
the third party is less than the price agreed upon between the
employee and the RMC, the RMC bills the shortfall to the
employer as part of the costs of sale, and the employer
reimburses the relocation company for that shortfall, along with
other sums contractually due.

At a point in time before the closing takes place on the
contract between the RMC and the third party buyer (the closing
on the sales contract, which is exhibit E), the employee
executes a document containing the content set forth in exhibit
F.

Request for Advisement

On the facts stated above, Client requests the Department's
advice as to whether documentary stamp tax is due only on the
completed deed to the third party, or on the completed deed and
on any antecedent documents.

Law and Discussion

Section 201.02(1), F.S., provides in pertinent part:

On deeds, instruments, or writings whereby any lands,
tenements, or other real property, or any interest therein,
shall be granted, assigned, transferred, or otherwise
conveyed to, or vested in, the purchaser or any other
person by his or her direction, on each $100 of the
consideration therefor the tax shall be 70 cents....

Florida's documentary stamp tax, as imposed under s.
201.02(1), F.S., applies to any instrument that conveys an
interest in Florida real property. The tax is based on the
consideration paid or given. Consideration includes, but is not
limited to, the money paid or to be paid; the discharge of an
obligation; and the amount of any mortgage, purchase money
mortgage lien, or other encumbrance, whether or not the
underlying indebtedness is assumed. If the consideration paid or
given in exchange for real property or any interest therein
includes property other than money, it is presumed that the
consideration is equal to the fair market value of the real
property or interest therein.

Position of the Department

It is the Department's position that none of the exhibits
attached to your TAA request convey a taxable interest in
Florida real property as contemplated under the purview of s.
201.02(1), F.S. The fact pattern outlined in your request also
does not provide for a document that would be subject to
documentary stamp tax under s. 201.02(1), F.S.

Your request for TAA seeks only the Department's position
with respect to the specific documents attached to your request:
a relocation management agreement as exhibit A; a contract of
sale between the relocating employee and the RMC as exhibit B; a
durable power of attorney as exhibit C; an incomplete deed
without grantee named as exhibit D; a contract of sale between
the RMC and a third party as exhibit E; and a document which is
an instruction to the lender holding the relocating employee's
mortgage loan as to the disposition of funds held by that lender
attached as exhibit F. Your request also represents that at no
time before the closing with the third party does a completed
deed exist that is capable of transferring legal title to the
relocating employee's property from the relocating employee to
anyone else. Accordingly, the Department's opinion is based
only on these specifically identified documents and only on the
facts represented in your request. No opinion is expressed on
the taxability of any other documents or as affected by other
facts.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response, your request
and related backup documents are public records under Chapter
119, F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department
within 15 days of the date of this letter.

Sincerely,

Charles T. Phillips
Tax Law Specialist
Technical Assistance and Dispute Resolution
Office of General Counsel

CTP/mh